Classified By: Ambassador John R. Hamilton
1. (C) Summary: At an informal dinner at the home of
President Portillo December 28 that also included FM
Gutierrez and the DCM, the Ambassador emphasize the need to
focus in Portillo's remaining year in office on being
recertified and on making progress in other areas -- human
rights, corruption and American citizen murder cases --
which, left unattended, could endanger U.S. Congressional
approval of the CAFTA. Although the conversation was civil,
Portillo was upset about Guatemala's impending
decertification, claiming it would weaken his ability to
govern effectively and undermine the "reformist" elements of
his government. The Ambassador disagreed, indicating that it
was not the reformist elements that were being decertified.
End Summary.
2. (C) President Portillo invited the Ambassador to an
"informal" dinner at his home before his presentation of
credentials ceremony, now set for January 8. The backdrop
was the increasingly public USG criticism of the government
in the latter half of 2002. In the two weeks before the
dinner, the local press had run stories based on two leaked
Guatemalan foreign ministry cables (from Brussels and
Washington) that, inter alia, reported that the USG was
weighing the cancellation of Portillo's visa and the
impending counternarcotics decertification of Guatemala.
-------------------------
CAFTA AND DECERTIFICATION
-------------------------
3. (C) As it had been in a meeting the previous day with
the Foreign Minister (ref), the Ambassador's main message was
that time had run out on taking steps that could avoid
decertification. The government needed to react, when the
announcement came, as positively as possible, making clear
its determination to win recertification by the time of the
next formal review process, in September. The Ambassador
also emphasized that the government would need to make
progress in other areas -- human rights,
corruption/transparency, American Citizen murder cases and
the like -- which, left to fester, could endanger U.S.
Congressional approval of a CAFTA agreement. The Ambassador
emphasized what an extraordinary opportunity CAFTA is for
Guatemala and Central America, offering the best
possibilities for reducing poverty and containing elements
that will strengthen transparency in all areas of government
having to do with trade. Portillo professed to be a strong
believer in free trade, pointing to several tariff cuts that
had increased competition in formerly protected markets
(Comment: his prime motivation for the cuts probably was to
attack opponents in the private sector). The Ambassador
recapped his December 27 conversation with FonMin Gutierrez,
in which the latter described steps (ref) that the GOG would
take to strengthen its trade negotiating team, which the
Ambassador candidly told the President was the weakest in the
region. Portillo, who showed no awareness we could detect of
the steps the FonMin had described (ostensibly with
Presidential approval), nodded his assent.
4. (C) Decertification, the Ambassador said, was
essentially a done deal. It would not be announced until
early to mid-January, but the decision had been objectively
based upon the GOG's performance, including the widespread
use by traffickers of the ports (comment: this was a
deliberate zinger, as the President's personal secretary,
Julio Giron, exercises de facto supervision over ports), and
the poor performance against traffickers, including the
failed raid in Zacapa, which clearly was leaked by someone in
the GOG (comment: another zinger). Portillo's reaction to
the latter was to agree that the failed raid was a shame and
to suggest later in the conversation that the Public Ministry
was to blame.
5. (C) However, based on some recent positive steps the GOG
had taken, the Ambassador said, it was likely that, in the
absence of any egregious backsliding in the interim, the USG
would approve a national interest waiver for Guatemala, thus
avoiding any economic sanctions. And, recertification during
2003 was a possibility, but one that the GOG must earn
through sustained, serious accomplishments. They should
start by complying with our six benchmarks. But the GOG would
need to do much more to get recertified. (Note: The
President was unaware that former FonMin Orellana had told
the Ambassador December 16 that his latest analysis was that
the President could order the extradition of Marin Castillo,
one of the six benchmarks for certification. Gutierrez will
see where the decision memo is -- but this illustrates the
sloppy staffing of important issues in the GOG.)
6. (C) The Ambassador said that decertification with a
waiver would permit CAFTA negotiations to begin with
Guatemala included (local rumor had Guatemala excluded) but
he said it was politically awkward to decertify a country and
begin free trade negotiations almost simultaneously. That
was why he had suggested to the Foreign Minister that we meet
again in early January for a more structured discussion of
the steps the GOG would need to take to be recertified and to
clear the way for CAFTA approval. Later in the dinner
Portillo asked how the USG had analyzed the likely political
consequences of decertification. Would it increase or
decrease his ability to govern effectively? Would it hurt
the traffickers or embolden them? In his opinion, echoed by
the Foreign Minister, decertification would weaken the
reformist and positive elements in the GOG during the final
and hardest year of his administration and would actually
strengthen the drug cartels, whose beyond-the-reach-of-law
status would only become more obvious. It would also become
a political issue, Portillo and Gutierrez admitted candidly,
during an election year.
7. (C) The Ambassador replied that we did not believe that
decertification would weaken the reformists. They were not
the ones responsible for decertification. Although the
opposition and press would seize upon decertification, the
GOG also had the opportunity to get recertified. When
Portillo complained that the system of criminal justice was
penetrated and corrupted by the drug traffickers, tying his
hands, the Ambassador responded that one of the weaknesses
that puts the drug kingpins beyond reach is the lack of a
criminal conspiracy statute. Portillo and Gutierrez reacted
positively to this, Portillo instructing Gutierrez to look
into it. The Ambassador suggested the GOG could best exert
political damage control by reasserting its commitment to
fighting drugs and its determination to win recertification
through tough action. It was in theory possible to win
recertification before the November elections. Portillo said
the GOG would of course adopt the most positive public
posture possible, as it had no other choice.
------------
Human Rights
------------
8. (C) The Ambassador asked Portillo and Gutierrez why
there was an increase in threats against human rights groups.
Portillo asked Gutierrez to respond; the Foreign Minister
said the basic reason was that several of the human rights
groups were involved in prosecutorial investigations that put
at risk numerous former members of the military. The latter
responded with the actions and threats of clandestine groups.
Portillo added noted that some in the international
community (comment: an allusion to us) had called upon the
government to use military intelligence (D-2) against the
clandestine groups. When previous governments had turned to
the D-2 to carry out police investigations, however, the
price was a lack of civilian control and human rights
violations. The DCM responded that our proposal was for the
D-2 to provide only information to the appropriate police and
public ministry officials, nothing more; if the D-2 refused
to share such information, it certainly provided a test of
civilian control of the military. Shifting subjects, the
President highlighted the impending reduction of some 150
members (about 20 percent) of the EMP (Presidential Military
Staff), a long overdue Peace Accords requirement. (Comment:
The President did announce this reduction the next day in the
six-year anniversary commemoration of the Peace Accords
(septel).
------------
Transparency
------------
9. (C) The recently created Transparency Commission,
observed the Ambassador, was under considerable pressure to
resign due to the President's charging the Commission with
ensuring the transparency of the disbursement of funds to be
collected through the (controversial) 750 million dollar
Eurobond issue. Could the President not assign this task to
some other entity, and allow the private and public members
of the Commission to focus on larger structural transparency
issues? The President agreed that this was a possibility,
and that perhaps the GOG could instead use a private
verification service to perform these functions. The
Ambassador then raised the lack of transparency and the size
of the military budget -- two items that went against the
Peace Accords, and also prevented the USG -- along with
other problems -- from having a normal relationship with the
Guatemalan military. Portillo agreed that the military
budget needed more transparency, and said he would explore
this (comment: a promise he has made before but never
followed through on). He disagreed, however, that the
military budget had increased significantly in real terms
since 1996 (comment: according to Minugua, the 2002 budget
is about 50 percent higher than the Peace Accords target of
0.66 percent of GDP).
-----------------------------
American Citizen Murder Cases
-----------------------------
10. The Ambassador said that, with another American citizen
murdered in December, eleven U.S. citizens had been murdered
in Guatemala in the last two years. None has been solved.
It is impossible to explain and justify the lack of progress
in these cases to the families involved and to the Congress.
--------------------
Election Observers
-------------------
11. (SBU) Asked, Portillo told the Ambassador that the GOG
would once again invite international election observers for
the 2003 elections -- the campaign as well as election day
itself. He urged the US to work with the Supreme Electoral
Tribunal (TSE), which he described as new and inexperienced.
(Comment: WHA DAS Fisk signed our assistance agreement with
the TSE in November. Portillo's statement is positive in
terms of assuring that the elections are free and fair.)
-------
Comment
-------
12. (C) The meeting covered our most pressing issues with
the GOG, and initiated the working relationship between the
President and the Ambassador. Portillo was polite and
responsive, but was uncharacteristically subdued. He showed
little enthusiasm for his upcoming last year in office.
Portillo is a complex personality; part of his positive and
pragmatic side was to invite the Ambassador to this working
dinner before the credentials ceremony. The decertification
decision, however, rankles him. He claimed that local
misinterpretation of A/S Reich's HIRC testimony cost him a
teaching job in Mexico after he leaves office in 2004 -- and
his tendency will be to respond to it negatively. We will
keep working with FonMin Gutierrez to get the GOG to react in
the most positive way possible. On CAFTA, the President was
relatively uniformed and unengaged. He is probably
personally suspicious of any process that might provide
benefits to the private sector, in which a number of his
enemies work. At the same time, he doesn't want to be left
behind by the rest of Central America. All in all, not a bad
first meeting, but genuine progress in all the areas
discussed will not be easy.
Hamilton

Raw content

C O N F I D E N T I A L SECTION 01 OF 03 GUATEMALA 000001
SIPDIS
E.O. 12958: DECL: 12/30/2008
TAGS: PREL, PGOV, EAID, SNAR, KDEM, PHUM, CASC, US, GT
SUBJECT: DRUGS, TRADE, AND HUMAN RIGHTS: AMBASSADOR'S FIRST
MEETING WITH PRESIDENT PORTILLO
REF: GUATEMALA 3306
Classified By: Ambassador John R. Hamilton
1. (C) Summary: At an informal dinner at the home of
President Portillo December 28 that also included FM
Gutierrez and the DCM, the Ambassador emphasize the need to
focus in Portillo's remaining year in office on being
recertified and on making progress in other areas -- human
rights, corruption and American citizen murder cases --
which, left unattended, could endanger U.S. Congressional
approval of the CAFTA. Although the conversation was civil,
Portillo was upset about Guatemala's impending
decertification, claiming it would weaken his ability to
govern effectively and undermine the "reformist" elements of
his government. The Ambassador disagreed, indicating that it
was not the reformist elements that were being decertified.
End Summary.
2. (C) President Portillo invited the Ambassador to an
"informal" dinner at his home before his presentation of
credentials ceremony, now set for January 8. The backdrop
was the increasingly public USG criticism of the government
in the latter half of 2002. In the two weeks before the
dinner, the local press had run stories based on two leaked
Guatemalan foreign ministry cables (from Brussels and
Washington) that, inter alia, reported that the USG was
weighing the cancellation of Portillo's visa and the
impending counternarcotics decertification of Guatemala.
-------------------------
CAFTA AND DECERTIFICATION
-------------------------
3. (C) As it had been in a meeting the previous day with
the Foreign Minister (ref), the Ambassador's main message was
that time had run out on taking steps that could avoid
decertification. The government needed to react, when the
announcement came, as positively as possible, making clear
its determination to win recertification by the time of the
next formal review process, in September. The Ambassador
also emphasized that the government would need to make
progress in other areas -- human rights,
corruption/transparency, American Citizen murder cases and
the like -- which, left to fester, could endanger U.S.
Congressional approval of a CAFTA agreement. The Ambassador
emphasized what an extraordinary opportunity CAFTA is for
Guatemala and Central America, offering the best
possibilities for reducing poverty and containing elements
that will strengthen transparency in all areas of government
having to do with trade. Portillo professed to be a strong
believer in free trade, pointing to several tariff cuts that
had increased competition in formerly protected markets
(Comment: his prime motivation for the cuts probably was to
attack opponents in the private sector). The Ambassador
recapped his December 27 conversation with FonMin Gutierrez,
in which the latter described steps (ref) that the GOG would
take to strengthen its trade negotiating team, which the
Ambassador candidly told the President was the weakest in the
region. Portillo, who showed no awareness we could detect of
the steps the FonMin had described (ostensibly with
Presidential approval), nodded his assent.
4. (C) Decertification, the Ambassador said, was
essentially a done deal. It would not be announced until
early to mid-January, but the decision had been objectively
based upon the GOG's performance, including the widespread
use by traffickers of the ports (comment: this was a
deliberate zinger, as the President's personal secretary,
Julio Giron, exercises de facto supervision over ports), and
the poor performance against traffickers, including the
failed raid in Zacapa, which clearly was leaked by someone in
the GOG (comment: another zinger). Portillo's reaction to
the latter was to agree that the failed raid was a shame and
to suggest later in the conversation that the Public Ministry
was to blame.
5. (C) However, based on some recent positive steps the GOG
had taken, the Ambassador said, it was likely that, in the
absence of any egregious backsliding in the interim, the USG
would approve a national interest waiver for Guatemala, thus
avoiding any economic sanctions. And, recertification during
2003 was a possibility, but one that the GOG must earn
through sustained, serious accomplishments. They should
start by complying with our six benchmarks. But the GOG would
need to do much more to get recertified. (Note: The
President was unaware that former FonMin Orellana had told
the Ambassador December 16 that his latest analysis was that
the President could order the extradition of Marin Castillo,
one of the six benchmarks for certification. Gutierrez will
see where the decision memo is -- but this illustrates the
sloppy staffing of important issues in the GOG.)
6. (C) The Ambassador said that decertification with a
waiver would permit CAFTA negotiations to begin with
Guatemala included (local rumor had Guatemala excluded) but
he said it was politically awkward to decertify a country and
begin free trade negotiations almost simultaneously. That
was why he had suggested to the Foreign Minister that we meet
again in early January for a more structured discussion of
the steps the GOG would need to take to be recertified and to
clear the way for CAFTA approval. Later in the dinner
Portillo asked how the USG had analyzed the likely political
consequences of decertification. Would it increase or
decrease his ability to govern effectively? Would it hurt
the traffickers or embolden them? In his opinion, echoed by
the Foreign Minister, decertification would weaken the
reformist and positive elements in the GOG during the final
and hardest year of his administration and would actually
strengthen the drug cartels, whose beyond-the-reach-of-law
status would only become more obvious. It would also become
a political issue, Portillo and Gutierrez admitted candidly,
during an election year.
7. (C) The Ambassador replied that we did not believe that
decertification would weaken the reformists. They were not
the ones responsible for decertification. Although the
opposition and press would seize upon decertification, the
GOG also had the opportunity to get recertified. When
Portillo complained that the system of criminal justice was
penetrated and corrupted by the drug traffickers, tying his
hands, the Ambassador responded that one of the weaknesses
that puts the drug kingpins beyond reach is the lack of a
criminal conspiracy statute. Portillo and Gutierrez reacted
positively to this, Portillo instructing Gutierrez to look
into it. The Ambassador suggested the GOG could best exert
political damage control by reasserting its commitment to
fighting drugs and its determination to win recertification
through tough action. It was in theory possible to win
recertification before the November elections. Portillo said
the GOG would of course adopt the most positive public
posture possible, as it had no other choice.
------------
Human Rights
------------
8. (C) The Ambassador asked Portillo and Gutierrez why
there was an increase in threats against human rights groups.
Portillo asked Gutierrez to respond; the Foreign Minister
said the basic reason was that several of the human rights
groups were involved in prosecutorial investigations that put
at risk numerous former members of the military. The latter
responded with the actions and threats of clandestine groups.
Portillo added noted that some in the international
community (comment: an allusion to us) had called upon the
government to use military intelligence (D-2) against the
clandestine groups. When previous governments had turned to
the D-2 to carry out police investigations, however, the
price was a lack of civilian control and human rights
violations. The DCM responded that our proposal was for the
D-2 to provide only information to the appropriate police and
public ministry officials, nothing more; if the D-2 refused
to share such information, it certainly provided a test of
civilian control of the military. Shifting subjects, the
President highlighted the impending reduction of some 150
members (about 20 percent) of the EMP (Presidential Military
Staff), a long overdue Peace Accords requirement. (Comment:
The President did announce this reduction the next day in the
six-year anniversary commemoration of the Peace Accords
(septel).
------------
Transparency
------------
9. (C) The recently created Transparency Commission,
observed the Ambassador, was under considerable pressure to
resign due to the President's charging the Commission with
ensuring the transparency of the disbursement of funds to be
collected through the (controversial) 750 million dollar
Eurobond issue. Could the President not assign this task to
some other entity, and allow the private and public members
of the Commission to focus on larger structural transparency
issues? The President agreed that this was a possibility,
and that perhaps the GOG could instead use a private
verification service to perform these functions. The
Ambassador then raised the lack of transparency and the size
of the military budget -- two items that went against the
Peace Accords, and also prevented the USG -- along with
other problems -- from having a normal relationship with the
Guatemalan military. Portillo agreed that the military
budget needed more transparency, and said he would explore
this (comment: a promise he has made before but never
followed through on). He disagreed, however, that the
military budget had increased significantly in real terms
since 1996 (comment: according to Minugua, the 2002 budget
is about 50 percent higher than the Peace Accords target of
0.66 percent of GDP).
-----------------------------
American Citizen Murder Cases
-----------------------------
10. The Ambassador said that, with another American citizen
murdered in December, eleven U.S. citizens had been murdered
in Guatemala in the last two years. None has been solved.
It is impossible to explain and justify the lack of progress
in these cases to the families involved and to the Congress.
--------------------
Election Observers
-------------------
11. (SBU) Asked, Portillo told the Ambassador that the GOG
would once again invite international election observers for
the 2003 elections -- the campaign as well as election day
itself. He urged the US to work with the Supreme Electoral
Tribunal (TSE), which he described as new and inexperienced.
(Comment: WHA DAS Fisk signed our assistance agreement with
the TSE in November. Portillo's statement is positive in
terms of assuring that the elections are free and fair.)
-------
Comment
-------
12. (C) The meeting covered our most pressing issues with
the GOG, and initiated the working relationship between the
President and the Ambassador. Portillo was polite and
responsive, but was uncharacteristically subdued. He showed
little enthusiasm for his upcoming last year in office.
Portillo is a complex personality; part of his positive and
pragmatic side was to invite the Ambassador to this working
dinner before the credentials ceremony. The decertification
decision, however, rankles him. He claimed that local
misinterpretation of A/S Reich's HIRC testimony cost him a
teaching job in Mexico after he leaves office in 2004 -- and
his tendency will be to respond to it negatively. We will
keep working with FonMin Gutierrez to get the GOG to react in
the most positive way possible. On CAFTA, the President was
relatively uniformed and unengaged. He is probably
personally suspicious of any process that might provide
benefits to the private sector, in which a number of his
enemies work. At the same time, he doesn't want to be left
behind by the rest of Central America. All in all, not a bad
first meeting, but genuine progress in all the areas
discussed will not be easy.
Hamilton

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